Parallel Economies in Syria: A New Interpretation of the Notion

Abstract

The war of sanctions initiated by the West against Russia has highlighted importance of concepts related to parallel economic processes which includes an imperative of broadening definition of the parallel economy beyond “shadow economy” and “local economy” approaches. The 11-yearlong Syrian conflict constitutes an example of genesis of parallel economies as products of warfare, foreign interventions, and terrorist assaults by the “Islamic State of Iraq and Syria” (ISIS). Those economies encompass the “ISIS caliphate,” “Autonomous Administration of Northern and Eastern Syria,” “Syrian Interim Government,” and “Syrian Salvation Government” – all non-controlled by the Syrian authorities [Matveev, 2022, p. 108]. Their features imply unequal economic potential along with high dependence on neighboring Turkey and Iraq. Reviewing siege economies and divided cities emerging on the Syrian soil together with comparative analysis of Syria and other Arab countries enables us to define conditions required for the genesis of a parallel economy. Among them deeply divided societies and/or armed conflicts on vast territories with deep fragmentation or in geographically isolated regions coinciding with large-scale foreign interventions, original diversification of income, and capabilities for foreign trade. In conclusion, the author defines the parallel economy as a system of economic relations grown within a state in coexistence with its official economy characterized by generating income, administrating economic affairs, and conducting foreign trade independently from the center. The Syrian experience of overcoming sanctions could become valuable for Russia which, in turn, using her political-military presence could assist in economic reunification of this country on the way to restoration of its territorial integrity.